Eesti Gaas: If low prices continue, customers will feel the effects in January

A gas hob.
A gas hob. Source: Priit Mürk/ERR

Estonian customers will benefit from falling global gas prices if the trend continues, Eesti Gaas said on Thursday. Alexela blamed the weather and developments in the Middle East for higher prices.

In July, Eesti Gaas' home customers paid 46 cents and Alexela household customers 45 cents per cubic meter of natural gas. At the same time, the average July price on the TTF exchange, which Baltic traders use to buy gas, was €32 per megawatt hour.

Winter prices have stabilized at €50 per megawatt hour, and in December it cost 75 cents per cubic meter for both Eesti Gaas and Alexela customers.

Kersti Tumm, communications and marketing manager of Eesti Gaas, told ERR the flexible package price for domestic customers is set and announced 30 days in advance, based on the latest information available at that time.

"We sell gas at the price we have set until the next decision. This is what we have done in the months where the market price has risen in the meantime," said Tumm. "At the end of September, we decided not to change the November selling price. As the market price started to rise in the meantime, at the end of October, we decided to adjust the sales price from December onwards."

The December market price is currently falling on the stock exchange and is currently €46 per megawatt hour.

"If this trend continues, we will bring the price cut to our customers as soon as possible. The price for January will be decided at the end of November," Tumm said.

Alexela energy trading portfolio manager Kalvi Nõu said the market is currently stable but may fall in future.

"It depends very much on what happens in the next month or two and what the weather is like. A lot depends on the weather. If it suddenly gets cold, the price might go up a little bit more, but I don't see it rising significantly over the next month or two," he noted.

As well as the weather, developments in Gaza also affect gas prices. For example, Israel was already forced to close access to one of its fields, and now cannot export gas to Egypt and is selling less LNG than usual.

"But if there were to be a major military conflict in the region, for example, if supplies to Qatar were threatened and maritime transport out of Qatar were to be disrupted, that's a greater risk," Kõva said. "But these risks are already priced in by the market and that is why we see futures in the €47-50 range."

In September, the chairman of the board of Eesti Gaas Margus Kaasik said this winter gas prices in Estonia are expected to be much cheaper than last year. This is because European tanks are more than 90 percent full and Latvian tanks are more than 80 percent full.


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Editor: Karin Koppel, Helen Wright

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